CRI听力:Private Firms Enter Shale-gas Exploration Market

Companies allowed to bid for the exploration rights will be state owned enterprises, joint-ventures and private ones based in China. They need to have registered capital of more than 300 million yuan or 47.3 million US dollars with oil, gas or minerals exploration experience. The news has boosted related stock prices. Analyst Wang Yuqiong is from the Founder Securities.

"The bidding this time has opened to private investors, which has given stocks related with gas exploration a lift. Many stock holders are positive about the development of shale gas in China so the related stocks have performed well."

Director Zhang Dawei of the Energy Reserve Evaluation Center from the Ministry of Land and Resources says the introduction of private investment will reduce exploration costs and enhance efficiency.

"Eighty five percent of the annual output of shale gas in the United States is from mid and small companies, most of which are private investors. They have a flexible operation system and can effectively reduce the exploitation costs."

But how to ensure that investors with different backgrounds can push forward with their exploration plans without big obstacles? Information Manager Han Xiaoping from the National Energy Website China5e.com says the government needs to allow these investors to share the benefits made from shale gas exploration.

"These companies need to be allowed to join the nearby gas transportation networks so that the gas produced can be used by nearby residents. And they also need to be allowed to generate electricity to enhance their productivity and lower their operational costs."

The Chinese government held its first shale gas auction in June 2010, with six state-owned companies bidding for exploration rights at four blocks.